CMS Holding Firm on Non-Filing MSA Settlements

February 14, 2022 – Michael Marsh

The following is directly from TowerMSA, an e-mail update on February 14, 2022. The article offers the position that Medicare / CMS is proceeding to hold that they have the right to assert a full settlement be used before Medicare benefits will be paid when a non-filing MSA is agreed to among the settling parties in WC. This follows an update to the CMS User Guide in January, 2022.  Below is the complete 2/14/2022 article:

===Beginning Of Article===

CMS Letter Confirms Non-Submit MSA Denial is Real

CMS to Hold WCMSA Webinar on February 17

The Centers for Medicare and Medicaid Services updated its Workers’ Compensation Medicare Set Aside (WCMSA) Reference Guide on 1/10/22 adding a section that addresses non-submit or evidence based MSAs. The new section makes it clear that CMS will treat the use of such MSAs as a potential attempt to shift the financial burden of future medical care to Medicare.

Since the update, questions have swirled around whether CMS will follow through and deny payment for Medicare beneficiaries with non-submit MSAs.

Now we know CMS does and will.

Tower obtained a recent letter sent to a Medicare beneficiary claimant in which CMS advised that while a certain amount for future medical was agreed to in settlement between the claimant and the employer/insurer, as the claimant chose to forgo the CMS WCMSA review process, Medicare will not pay until the entire settlement minus procurement costs is exhausted. In other words, the non-submit MSA is not recognized as the limit of settlement funds available to pay for future medical.

The letter states:

Section 1862(b)(2)(A) of the Social Security Act prohibits the Medicare program from making payment where payment was made or may reasonably be expected to be made by another party. 42 C.F.R. 411.46 specifically allows Medicare to deny payment for treatment of work-related conditions if a settlement does not "adequately protect Medicare's interest"-that is, does not include enough money to pay for treatment of those conditions. Because you did not seek prior review and approval by CMS of the amount set aside in your settlement for your future medical care, Medicare will not pay for the treatment of your work-related condition until you have demonstrated the appropriate exhaustion of your "net" settlement proceeds. Please review the enclosed package for information about the submission of annual attestations. Once you have shown that the settlement proceeds (total settlement amount minus procurement costs such as attorney fees, and minus funds repaid to Medicare for care prior to the date of settlement) have been exhausted, Medicare will make payment again. If you have questions about this letter, please call RO-09 CUSTOMER SERVICE at (415) 744-3658.

Also notable is that CMS issued the letter on 1/13/2022, a few days after the WCMSA Reference Guide update on 1/10/2022. In addition, the letter references a settlement date of 11/17/2021, one that occurred before the update. This confirms CMS is reviewing non-submit MSAs retrospectively.

The letter shows that CMS does not recognize the amount set aside for future medicals when it has not reviewed and approved the MSA. Instead, the Medicare beneficiary claimant must exhaust the amount in their entire settlement minus procurement costs before Medicare will cover future medicals. The following scenario illustrates this:

Parties settle a workers’ compensation case for $50,000 inclusive of $10,000 for a non-submit or evidence-based MSA. Procurement costs (attorney’s fees and expenses) are $12,000 of the settlement. Post-settlement the claimant Medicare beneficiary (whether self or professionally administering the MSA) uses the $10,000 to pay for injury-related treatment and medications. However, treatment is still needed.

At this point, Medicare’s position is that the entire settlement amount minus procurement costs, $50,000 - $12,000 = $38,000 is available to pay for such care. It would need to be documented to CMS that not just $10,000, but $38,000 was paid for injury-related care before Medicare steps in to pay.

There is no problem with Medicare unless the $10,000 runs out and injury-related care is still needed.

As Tower discussed in our prior article, CMS: Non-Submit MSAs Potentially Shift Costs to Medicare, and in our recent webinar, many questions remain. Some may be answered in CMS’s upcoming webinar on Thursday, February 17, at 1 p.m. ET.

Here is the announcement:

CMS will be hosting a webinar to discuss a variety of WCMSA topics, including a summary of what’s new in Medicare set-asides, and addressing questions related to the inclusion of treatments, application of state rules, re-reviews/amended reviews and more. The webinar format will be opening remarks and a presentation by CMS followed by a live question and answer session with representatives from CMS.

Note, there is no pre-registration, instead just follow the provided link shortly before the webinar start time.

Additionally, Tower is working with our industry colleagues at the National MSP Network (MSPN) to directly address questions around the policy and seek needed clarifications, especially around retrospective applicability, Medicare beneficiary claimant appeal rights, and settlements that do not meet CMS WCMSA review thresholds.

The bottom line is CMS has begun 2022 with a significant effort to assert what it believes is its right to claim the entire settlement amount, minus procurement costs, as available to pay for future injury-related medical when the settlement does not include a CMS-approved MSA. Parties to settlements where the CMS WCMSA review thresholds are met and the MSA is not submitted should be wary of the risks and the potential extent of liability for payment of future medical before Medicare will pay for injury-related care.

Since its founding a decade ago, Tower has recommended MSA submission when CMS review thresholds are met. Consequently, we have extensive experience in the CMS submission process and can identify and address MSA cost drivers and facilitate quick CMS MSA approval. We would be pleased to discuss a seamless transition from a non-submit to submit MSA program which properly addresses future medical costs while also confirming CMS compliance.

If you have any questions, please contact Dan Anders, Chief Compliance Officer, at 888.331.4941 or

===End Of Article===

For workers' compensation settlements, CMS is now putting forward a position that in cases involving non-filing Medicare Set Asides ("MSAs") that Medicare benefits stop until the full amount of the settlement (less fees) is used for medical care. Commentators and some in the legal industry have indicated that the CSM position is unwarranted, not authorized by law or statute and potentially unconstitutional.  However, others wonder if and when there will be legal challenge to the position.

 More information from CMS on the MSA topic and access to the webinar is located at 

Takeaway:  Use non-filing MSAs in settlements with the knowledge of the new CMS position. Expect much more activity on this topic in the coming years.

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